Wednesday, July 25, 2012

Obamacare facts: You can’t keep your old insurance

In the rush to pass a government takeover of the health insurance industry, President Obama repeatedly promised that Americans would not be forced to change doctors or insurance. On several occasions, President Obama told voters, “If you’ve got health insurance [and] you like your doctor, you like your plan, you can keep your doctor [and] you can keep your plan.” In reality, millions of Americans will not be able to keep their old insurance policies.

The Affordable Care Act dictates that insurance companies add many coverages that were not previously mandatory. Part 1 Section 1302 of the law defines the “essential health benefits” that congressional Democrats have decided that every American must have. These include maternity coverage, preventive and wellness services, and mental health coverage. In the past, policy holders could opt of these coverages if they did not want them to save money. For example, a man or a woman who could not have children could have maternity coverage excluded. Now it must be bought and paid for even if the coverage is of no use to them. Cost sharing is also limited under this section of the ACA. This means that Americans can no longer choose a no-frills, high-deductible insurance plan.

Under the Affordable Care Act, the government requires health insurance companies to sell more expensive policies. The individual mandate requires that all Americans buy these new, more expensive policies or pay a tax. Obamacare does not allow Americans to choose a basic major medical policy with a high deductible to save money.

Additionally, Section 1302 also empowers the Secretary of Health and Human Services to revise the minimum essential benefits. This means that the HHS Secretary can unilaterally decide that all Americans should have a certain health insurance coverage and require all insurance companies to include it in their policies. As more coverage becomes essential, the cost of insurance is certain to rise.

Another aspect of the law is likely to cause many Americans to lose their entire current policy. A June 2011 survey in McKinsey Quarterly found that 30 percent of employers will definitely or probably stop offering group health insurance when the Affordable Care Act takes full effect after 2014. Among employers “with a high awareness of reform,” the percentage increases to half. More than 60 percent would look for alternatives to traditional group health plans.

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